Vancouver home prices fall for fifth consecutive month
OTTAWA — Homes prices edged down 0.2 per cent in February from the month before but were still 6.1 per cent higher than a year ago, according to a well-watched housing index.
The month-over-month decline was the third such retreat in the past four months for the Teranet-National Bank National Composite House Price Index, released Wednesday, which measures price changes for repeat sales of single-family homes.
In January, prices rose 0.1 per cent.
Teranet's report showed prices falling from the previous month in six of the 11 metropolitan markets surveyed.
In Canada's two hottest real-estate markets, prices in Vancouver fell 0.3 per cent, the fifth consecutive decline, while prices in Toronto rose by just 0.1 per cent. On a yearly basis, however, Toronto prices were 10 per cent higher.
Nationally, prices were 6.1 per cent higher than a year ago. In January, prices were 6.5 per cent higher.
The data is likely to show up on the radar of Bank of Canada governor Mark Carney, who has repeatedly warned that Canadians are piling on too much debt as they buy homes whose prices keep rising.
At a House of Commons finance committee meeting Tuesday, Carney warned that house prices in relation to income levels are now running 35 per cent above historical norms.
Last week, the Canadian Real Estate Association reported that seasonally adjusted sales in March rose 1.6 per cent from year-earlier levels, although the national average home price declined 0.5 per cent to to $369,677.
"It is a fact that according to CREA (the Canadian Real Estate Association) data for March, five of the 11 markets covered were rather favourable to sellers (Toronto, Hamilton, Winnipeg, Halifax and Quebec City). Overall, the Canadian market is nevertheless balanced," said National Bank senior economist Marc Pinsonneault.
Metropolitan area % change m/m / % change y/y
Calgary / -0.6 % / +1.3 %
Edmonton / -1.0 % / +1.1 %
Halifax / +0.4 % / +2.3 %
Hamilton / -0.8 % / +7.5 %
Montreal / +0.2 % / +4.4 %
Ottawa / -0.4 % / +4.6 %
Quebec / +1.6 % / +5.6 %
Toronto / 0.1 % / +10.0 %
Vancouver / -0.3 % / +6.2 %
Victoria / -1.1 % / -1.7 %
Winnipeg / +0.2 % / +8.2 %
National Composite / -0.2 % / +6.1 %
Source: Teranet-National Bank National Composite House Price Index
Metro Vancouver housing market remains balanced despite sharp sales drop: report
Local homes sales are in a balanced state despite the lowest April sales numbers since 2001, according to a report by the Real Estate Board of Greater Vancouver.
“Although April sales were below what’s typical for the month, we continue to see, with a sales-to-active listing ratio of nearly 17 per cent, a balanced relationship between buyer demand and seller supply in our marketplace,” Eugen Klein, REBGV president said in a statement.
“Recent activity has had a stabilizing effect on home prices at the regional level, although pricing can vary depending on area and property type.”
According to the monthly report, homes sales and listings have maintained a consistent pace in recent months, contributing to the balanced conditions.
However, the report noted that Metro Vancouver sales totalled 2,799 in April 2012, a 13.2-per-cent decline compared to the 3,225 sales in April 2011 and a decline of 2.6 per cent compared to the 2,874 sales in March 2012.
April sales were the lowest total for the month in the region since 2001 and 16.9 per cent below the 10-year April sales average of 3,369, the board said in a release.
New listings for detached, attached and apartment properties totalled 6,056 in April, a 3.6-per-cent increase compared to both March 2012 when 5,843 homes were listed and April 2011 when 5,847 homes were listed for sale.
Last month’s new listing total was 6.7 per cent above the 10-year average for listings in Greater Vancouver for April, the release said.
At 16,538, the total number of homes listed for sale increased 8.5 per cent in April compared to last month and 16 per cent above this time last year.
The benchmark price for all residential properties stood at $683,800, up 3.7 per cent compared to April 2011 and an increase of 2.8 per cent over the last three months.
Sales of detached properties in April 2012 reached 1,126, a decline of 19.7 per cent from the 1,402 detached sales recorded in April 2011, although the benchmark price for detached properties increased 6.3 per cent from April 2011 to $1,064,800.
The highest benchmark price in April for a detached home was Vancouver West at $2.27 million, followed by West Vancouver at $1.98 million.
The benchmark price of an apartment increased 1.1 per cent from April 2011 to $375,900, while the price of a townhome increased 1.7 per cent between April 2011 and 2012 to $487,300.
Meanwhile, the Fraser Valley's housing market also showed a drop in sales year-over-year, although not as sharp as in Metro Vancouver.
According to the Fraser Valley Real Estate Board, there were 1,435 sales processed in April, down five per cent from April 2011, but up slightly from 1,412 sales in March.
In April, the board added seven per cent more new listings compared to one year ago, up to 3,134 from 2,918 last year. That pushed the number of properties for sale to 10,312, the highest level since July 2010.
“To put it in perspective, in the last decade, April 2012 ranked second lowest for sales during that month, while new listings came in at the third highest, meaning it’s a good time to be shopping for a home in the Fraser Valley because selection has only been this extensive twice,” said board president Scott Olson in a statement.
According to the report, the benchmark price for a detached home in the Fraser Valley rose 5.3 per cent in the year, from $547,800 in April 2011 to $576,600 last month.
In April, the price of a townhouse was $318,400, up 1.9 per cent year-over-year, while the price of an apartment increased 0.8 per cent over the same period to $205,800.
B.C. property assessments skyrocket but appeals drop off
VANCOUVER — Despite skyrocketing and sometimes uneven property assessments that will mean property tax increases for some homeowners, appeals are down in key areas compared to this time last year, according to BC Assessment.
With 10 days to go before the Jan. 31 deadline, appeals have fallen 15 per cent in the Vancouver-Sea to Sky region and 18 per cent in the Richmond-Delta region, two areas that saw assessments in some areas jump by as much as one-third, said Grant McDonald, deputy assessor for BC Assessment’s Vancouver Sea to Sky region.
The average assessment increase in Vancouver was 16.4, 15.9 in West Vancouver and 16.5 in Richmond.
Some assessments went up much more than the average increase, such as a two-storey house built in 1972 on a 60-by-120-foot lot on Riverdale Avenue in the Thompson area of Richmond that went up $300,000 from $780,200 last year to $1,083,500 this year, said Richmond realtor Shafik Ladha.
McDonald gave an example of a house on the west side of Vancouver on a 50-foot lot that went from $1,189,000 last year to $1,645,000 this year, an increase of $456,000. Both of these examples are up 38 per cent, more than double the average increase in their cities.
People who saw their property go up more than the average will likely see a bigger-than-usual increase in their tax bill, although the amount of that increase will depend on the assessed value of their home and how much the city’s budget is increased.
Vancouver Councillor Raymond Louie, who chairs the city’s finance and services committee, said it’s not automatic that the city will get more money when people’s property assessments go up.
“When your property value goes up, the city takes that assessed value and divides that into what it takes to run our city,” Louie said. “The amount it takes to run our city generally stays about the same. The city does not get additional revenue just because your property value goes up.”
Former Vancouver city councillor Gordon Price said it’s fair that taxes are linked to a property’s assessed value, but that it’s important to remember there isn’t a one-to-one relationship between property assessments going up and property taxes going up.
“Whatever your percentage increase is above the average, you can expect that you will be paying a greater percentage of the city’s property tax,” said Price, who is director of the City Program at SFU. “It would be very difficult to come up with anything else that would be more fair.”
In Vancouver, assessed values are averaged over three years to mitigate the effect of large single-year value increases, Louie said. He and Price also noted that property taxes do not all go to the city, a portion goes to school taxes, TransLink and other levies.
This year certain neighbourhoods went up more than others, something McDonald said is simply based on what actual sales reveal. Both Vancouver realtor Tom Gradecak and Ladha said good schools made a big difference in an area’s popularity.
Sometimes that will mean that houses on one side of the street sell for much more than those on the other side, if the school boundary is drawn down the middle, Gradecak said.
Gradecak said assessments are traditionally lower than market value, but that they’re moving closer.
“Some of the assessments are now quite close to the market value, but most are still a little bit low,” Gradecak said. “If it’s an older home, some of the assessments can be fairly close [to market value] because they’re looking mostly at the land value. For the newer homes, the assessments could be a bit low because they don’t always take into account all of the improvements.”
Assessments are a snapshot of market value on July 1 of the previous year. By the time homeowners receive them in early January, they are already six months out of date.
One reason appeals are down may be the amount of information now available online. Assessed values are all online (http://evaluebc.bcassessment.ca/) and people can compare homes by address and by comparable sales.
Fewer than two per cent of homeowners usually appeal an assessment in any given year, McDonald said.
People who want to ask questions about their assessment, or the appeal process, can call BC Assessment at the number listed on their assessment.
“We’ve got a team of professional appraisers you can call and they will know your neighbourhood, they may even know your house, but they can certainly call it up on the computer, and talk to you about the specifics of your property,” McDonald said.
“If at the end of that process [you are not satisfied], there is the last resort of filing an appeal.”
Balanced real estate market prevailed through much of 2011
REBGV Stats December 2011
The 2011 Greater Vancouver housing market began with heightened demand in regional hot spots and concluded with greater balance between seller supply and buyer demand.
The Real Estate Board of Greater Vancouver (REBGV) reports that total sales of detached, attached and apartment properties in 2011 reached 32,390, a 5.9 per cent increase from the 30,595 sales recorded in 2010, and a 9.2 per cent decrease from the 35,669 residential sales in 2009. Last year’s home sale total was 6.3 per cent below the ten-year average for annual Multiple Listing Service® (MLS®) sales in the region.
The number of residential properties listed for sale on the MLS® in Greater Vancouver increased 2.7 per cent in 2011 to 59,549 compared to the 58,009 properties listed in 2010. Looking back further, last year’s total represents a 12.8 per cent increase compared to the 52,869 residential properties listed in 2009. Last year’s listing total was 11.1 per cent above the ten-year average for annual Multiple Listing Service® (MLS®) property listings in the region.
“It was a relatively balanced year for the real estate market in Greater Vancouver with listing totals slightly above historical norms and sale numbers slightly below,” Rosario Setticasi, REBGV president said.
Residential property sales in Greater Vancouver totalled 1,658 in December 2011, a decrease of 12.7 per cent from the 1,899 sales recorded in December 2010 and a 29.7 per cent decline compared to November 2011 when 2,360 home sales occurred.
More broadly, last month’s residential sales represent a 34.1 per cent decrease over the 2,515 residential sales in December 2009, a 79.4 per cent increase compared to December 2008’s 924 sales, and a 12.6 per cent decrease compared to the 1,897 sales in December 2007.
The overall residential benchmark price, as calculated by the MLSLink Housing Price Index®, for Greater Vancouver increased 7.6 per cent to $621,674 between Decembers 2010 and 2011. However, prices have decreased 1.5 per cent since hitting a peak of $630,921 in June 2011.
“Our market remained in a balanced state for most of the year, although higher levels of demand for detached properties in the region’s largest communities caused prices in certain areas to rise higher than others,” Setticasi said. “For example, the benchmark price of a single-family detached home experienced double-digit increases in nine areas within the region over the last 12 months.”
New listings for detached, attached and apartment properties in Greater Vancouver totalled 1,629 in December 2011. This represents a 4.1 per cent decline compared to the 1,699 units listed in December 2010 and a 49.4 per cent decline compared to November 2011 when 3,222 properties were listed.
Sales of detached properties in December 2011 reached 630, a decrease of 18.1 per cent from the 769 detached sales recorded in December 2010, and a 30.2 per cent decrease from the 902 units sold in December 2009. The benchmark price for detached properties increased 11.2 per cent from December 2010 to $887,471.
Sales of apartment properties reached 774 in December 2011, a decline of 4.6 per cent compared to the 811 sales in December 2010, and a decrease of 32.9 per cent compared to the 1,154 sales in December 2009.The benchmark price of an apartment property increased 3.7 per cent from December 2010 to $401,396.
Attached property sales in December 2011 totalled 254, a decline of 20.4 per cent compared to the 319 sales in December 2010, and a 44.7 per cent decrease from the 459 attached properties sold in December 2009. The benchmark price of an attached unit increased 4.2 per cent between December 2010 and 2011 to $511,499.
B.C. Assessment released its data on the value of homes in the province on Tuesday. While some regions saw values skyrocket, others dropped. Take a look to see how your property's value (and your taxes) will jump this year.
List ranked in order from largest hike to biggest drop in values:
1. Vancouver - Up 16.42%
2. Richmond-Delta - Up 12.83%
3. North Fraser (Burnaby, Coquitlam, etc.) - Up 8.45%
4. Surrey-White Rock - Up 7.83%
5. Peace River - Up 7.44%
6. North Shore-Squamish Valley - Up 6.48%
7. Northwest B.C. (Prince Rupert, Terrace, Kitimat) - Up 4.74%
8. Prince George - Up 2.36%
9. Fraser Valley - Up 1.67%
10. Nelson/Trail - Up 1.08%
11. Cariboo - Up 0.32%
12. Central Vancouver Island (Nanaimo) - Down 0.06%
The B.C. government has raised the threshold for homeowner property grant to $1.285 million to accommodate rising property values.
The news comes as hundreds of thousands of annual property assessments are being prepared for B.C. property owners by the government. Last year, the threshold was $1.15 million. The grant effectively reduces the property tax paid by most B.C. homeowners by up to $1,045.
Every year the province adjusts the grant to ensure 95.5 per cent of homeowners receive the full amount of the grant. Those with homes above the threshold may still be eligible for part of the grant.
"The homeowner grant provides a maximum reduction in residential property taxes on principal residences of $570 in the Capital, Greater Vancouver and Fraser Valley regional districts and $770 elsewhere in the province," said a statement issued by the government on Tuesday.
"An additional grant of $275 is available to those who are age 65 or over, permanently disabled or a veteran of certain wars,."
"We continue to see challenging economic times around the world. By maintaining the homeowner grant, we continue to help families with the costs of owning their homes," said Finance Minister Kevin Falcon in the statement.
The grant is only available to Canadian citizens and to landed immigrants who normally reside in B.C.
REGIONAL HOUSING MARKETS: A YEAR IN REVIEW AND A LOOK AHEAD
Gradual unwinding of the over-valuation in house prices across the country
Highlights
As the year draws to a close, we conclude that the Canadian housing market put forth a respectable showing. Annual price gains are estimated at 7.5% in 2011 and sales’ growth ought to come in positive as well, but at a much more modest pace of 2.2%.
Behind the headline figure, we have seen gains in prices and sales activity decelerate in recent months. Some of the underlying factors include tighter insured mortgage financing rules and weakened confidence related to the stability of the economic recovery. Helping cushion the impact of these negative forces has been the persistence of low mortgage rates.
We believe that the average Canadian home price is over-valued by roughly 10%. Metrics like price to income, price to rent, and affordability all support this conclusion. We expect that the price excess will gradually unwind over the next two years in light of a softening in employment conditions in 2012 followed by higher interest rates in 2013.
In contrast to the resale market, starts continue to come in well above expectations. The strength witnessed over the last few years has been driven exclusively by the multi-residential category. Consistent with weaker resale markets, we expect new starts to trend toward 170,000-180,000 units in the 2012-13 period.
In addition to our national perspective, we provide an in-depth forecast of twelve major markets. While no urban center will be immune to the macroeconomic and interest rate headwinds, Calgary and Edmonton are likely to do better than the rest. By contrast, a larger-than-average price and sales correction looks to be in store for both Toronto and Vancouver.
Homebuyers came out in the early part of 2011 to take advantage of record-low interest rates and to beat out changes to new insured mortgage financing rules. With Canadians bringing forward their purchases and national job gains tapering off since the autumn, the past few months have recorded more modest price and sales gains. In all, 2011 put forth a very respectable showing with price appreciation clocking in at an estimated 7.5% and sales growth also positive, but at a more modest 2.2%. At around 190,000 units, housing starts also continued to come in above long-run averages.
Looking ahead, we anticipate a tug-of-war action to take hold in the Canadian real estate market. At one of the rope is the magnetism of low interest rates; at the other end are subdued prospects for economic, income and employment growth. Ultimately, we expect the economic side of the equation to win out over the near-term. In particular, the first half of 2012 is likely to be characterized by ongoing confidence-sapping events in Europe, global financial turbulence and slowing world economic growth.
While housing activity is expected to do somewhat better in the second half of the year, as external clouds start to dissipate, rising Canadian interest rates in 2013 should erect the next road block in the way of housing markets. Overall, we expect sales to record annual average declines of 2.4% and 3.5% in 2012 and 2013, respectively. Prices are poised to suffer a similar fate – annual average declines of 1.9% in 2012 and 3.6% in 2013. Starts should dip to an average 170,000 to 180,000 units in 2012-13. Collectively, these adjustments will gradually erase the over-valuation in the marketplace.
While no urban center will be immune from economic volatility and higher prevailing interest rates, some regions are expected to do better than others over the next two years. Among the twelve major markets profiled in this report, Calgary and Edmonton ought to lead the pack. Solid economic fundamentals and the absence of a recent run-up in prices support our call. Toronto and Vancouver do not appear to be as lucky – we have them experiencing a greater-than-average correction in both sales and prices over the next two years.
Canada’s housing market defies the odds in 2011
In 2011, the national housing market turned in a respectable performance despite some notable hurdles. In the spring, the federal government responded to growing signs of excessive household indebtedness by announcing a further tightening in the rules surrounding insured mortgages.
In order to beat this announced change, we suspect that many homebuyers brought forward their purchases earlier in the year. In the summer, a combination of concerns about European sovereign debt, a U.S. government credit rating downgrade and worries about the global recovery led to increased uncertainty. Businesses have responded by reducing hiring in Canada since the autumn. Yet, home sales are headed for their seventh gain in ten years; prices are on tap to see their ninth gain in ten years. Still, a closer look at the data shows that activity in most of Canada’s major markets has moved past its peak and has since landed softly.
Average residential prices have also been skewed by outsized strength in Vancouver and to a lesser extent, Toronto. If we were to exclude these two major markets, the price and resale activity gains would be much more muted than the headline number would suggest.
In the new home market, starts have fallen from their peak levels of 229,000 recorded in 2007. But at an estimated 192,000 new starts in 2011, readings continue to remain well above demographic fundamentals, which we calculate to be 180,000 units. Similar to the resale side of the story, the national numbers have been skewed disproportionately by strong performances in large urban markets, notably Toronto. If we were to exclude Toronto from the national tally, total starts would have declined significantly in 2011.
Metrics point to over-valuation embedded in home prices today
As we recast our focus on where the housing market is headed, there has been considerable attention given to the extent of over-valuation in Canadian home prices. There is no definitive measure that one can point to quantify the degree of excess (with absolute certainty) imbedded in average residential prices in Canada today. Each measure carries with it some underlying concern about the conclusions that can be made. For example, if we use the average price-torrent ratio as a benchmark, it would tell us that homes are over-inflated by as much as 75% relative to the long-run average. However, the ratio inherently ignores the impact of changing mortgage rates, the presence of provincial rent control measures, and a potential divergence in quality between owned and rental accommodation.
Taking a look at just real home prices would lead to a conclusion that houses are priced more than 60% higher than the long-run average. Still, historical prices do not factor in key structural changes over time, such as lower trend mortgage rates, longer amortization periods, rising land values, transit development nearby, improved home quality and rising incomes. The price-to-income measure attempts to take income movements into consideration, but still does not capture some of the other factors previously presented. Based on this measure, prices are 44% over-valued. A more defensible measure assumes that total housing costs relative to income eventually revert back to a long term average. If we use this measure and assume a return to more normal levels of interest rates, the degree of overvaluation would be around 10-15%. Given the behavior of sales and price trends in recent years – one that does not share bubble-like characteristics such as those in the U.S. pre-2007 – we are comfortable with this estimate of national price over-valuation.
Less supportive factors on tap for housing
When we look ahead to our 2012-13 forecast period, we see that the headwinds facing both supply and demand will increase in intensity. In turn, we anticipate resale price froth to gradually evaporate leaving the market in a more balanced position relative to where it stands today. More specifically, we expect both sales and prices to record annual average declines in both 2012 and 2013, with the latter year expected to record the brunt of the hit. Several factors support our forecasts, which we briefly delve into next.
Modest economic, income and employment growth over short-term
Real GDP growth in Canada is estimated at a solid 2.4% in 2011. However, storm clouds will increasingly hang over our small open economy during the first half of 2012. Much of the risk surrounds the European sovereign debt crisis and the failure of politicians to take decisive action so far to pour water over the flame. The base case scenario embedded in our forecast includes a recession within Europe, coming to a climax in early 2012 when borrowing pressures and requirements will be heightened. Financial market volatility and a global economic slowdown will likely play out as a result. In this context and given our export-based economy, real GDP growth is projected to slow to a minimal 1% on average during the first half of 2012. With these headline numbers, the national unemployment rate is expected to increase from 7.3% to 7.7% by the middle of next year.
National employment growth is also poised to be sub-1.0%, on a quarterly basis, during the first half of the year, while gains in after-tax incomes will be significantly restrained.
Prices and sales tend to be negatively correlated with financial market volatility and job and economic uncertainty – a house is too big an asset for most families to jump into when job security is in question and financial portfolios are vulnerable to sizeable swings in total value. As a consequence, resale prices and sales are expected to decline during the first half of 2012, before the turbulence eases in the months thereafter. In our forecast, we make the explicit assumption that – faced with a mounting crisis – leaders in Europe ultimately take bold action to address the situation, thus delivering benefits to financial markets and economies around the world. As such, Canada’s economy and job market is likely to regain traction in the second half of 2012 and into 2013, with real GDP growth rebounding to above 2.0%.
At the regional level, we believe the resource-based provinces of Alberta, Saskatchewan and Newfoundland and Labrador will continue to carry the best economic prospects over the 2012-13 period. The manufacturing-heavy regions of Ontario, Québec and Manitoba are expected to come in close to the national average. Last but not least, the Maritime provinces should see sub-par numbers over the next two years, with Nova Scotia being the as shipbuilding work gets underway.
Historically normal activity keeps the Greater Vancouver housing market in a balanced state
The Greater Vancouver housing market saw relatively typical home sale and listing activity in November.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties on the region’s Multiple Listing Service® (MLS®) reached 2,360 in November. This represents a 5.9 per cent decline compared to the 2,509 sales in November 2010 and a 1.9 per cent increase compared to the 2,317 sales recorded in October 2011.
Looking back further, last month’s residential sales total is 5.8 per cent below the ten-year average for sales in November.
“The pace of home listings entering the market eased slightly in November, compared to recent months, while sale levels remained fairly normal for this time of year,” Rosario Setticasi, REBGV president said. “November activity helped put our market firmly in balanced territory.”
New listings for detached, attached and apartment properties in Greater Vancouver totaled 3,222 in November. This represents a 26.3 per cent decline compared to the 4,374 new listings reported in October 2011, but a 6.3 per cent increase compared to November 2010 when 3,030 properties were listed for sale on the MLS®.
Looking back further, last month’s new listing total is 2.1 per cent above the ten-year average for November.
The total number of properties currently listed for sale on the Greater Vancouver MLS® sits at 14,090, a decline of 9 per cent compared to October 2011 but an increase of 13 per cent when compared to this time last year.
The MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 7.2 per cent to $622,087 in November 2011 from $580,080 in November 2010.
Since reaching a peak in June of $630,921, the benchmark price for all residential properties in the region has declined 1.4 per cent.
Sales of detached properties on the MLS® in November 2011 reached 916, a decrease of 12.8 per cent from the 1,050 detached sales recorded in November 2010, and a 21.3 per cent decrease from the 1,164 units sold in November 2009. The benchmark price for detached properties increased 11.4 per cent from November 2010 to $890,204.
Sales of apartment properties reached 1,000 in November 2011, a 4.9 per cent decrease compared to the 1,052 sales in November 2010, and a decrease of 28.4 per cent compared to the 1,396 sales in November 2009. The benchmark price of an apartment property increased 2.7 per cent from November 2010 to $399,686.
Attached property sales in November 2011 totaled 444, a 9.1 per cent increase compared to the 407 sales in November 2010, and a 15.1 per cent decrease from the 523 attached properties sold in November 2009. The benchmark price of an attached unit increased 4.5 per cent between November 2010 and 2011 to $510,960.
HST change likely to delay new-home sales in BC until its elimination
Plans to remove the HST and return to a provincial sales tax mixed with the Goods and Services Tax will probably cause some potential buyers of new homes in British Columbia to delay purchases until 2013, Central 1 Credit Union forecasts.
In a news release Thursday, Central 1 economist Bryan Yu said: "People looking at new homes priced over $525,000 may very well wait until the tax changes lower the 12 per cent hit they face."
The HST added provincial tax to new housing on top of GST and $525,000 was the upper limit for a rebate program intended to add no additional tax on homes.
Yu is forecasting that B.C.'s total home sales through the Multiple Listing Service will reach 88,200 units by the end of this year, which is down one per cent from 2010's sales mark.
However, while resale home transactions are forecast to end the year 4.7 per cent ahead of 2010, new home transactions will lag by 26 per cent.
While sales will remain soft, the median price will rise 6.8 per cent to $417,000, Yu said.
"The real estate market will remain stable for the next couple years, weighed down by global economic issues, moderate employment and population growth and changes to mortgage insurance rules," Yu said.
Central 1 forecasts that next year total home sales are expected to increase by about 3.4 per cent, driven by higher new home sales. The resale of existing homes will decline.
Meanwhile, the Canadian Real Estate Association released a report Thursday showing that the sale of existing homes across Canada declined 0.5 per cent in August.
On a seasonally adjusted basis, sales totalled to 37,177 units during the month, down from 37,378 in the previous month, the industry group said. However, sales were still up 15.8 per cent from August 2010, on a non-adjusted basis.
The national average home price of $349,916 in August, on a non-adjusted basis, was up 7.7 per cent from a year earlier.
"[Economic] headwinds will likely persist until, and indeed after, fiscal quagmires in the U.S. and Europe are resolved. In the meantime, the Bank of Canada will have ample reason to delay raising interest rates further, which is supportive for the Canadian housing market."
Greater Vancouver home sales trend toward buyers’ market over summer
VANCOUVER, BC – August marked the third consecutive month that home sale activity in Greater Vancouver was below the 10-year average for the month. In contrast, home listing activity in the region has exceeded the 10-year norm every month since the beginning of the year.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties on the region’s Multiple Listing Service® (MLS®) reached 2,378 in August. This total represents an eight per cent increase compared to the 2,202 sales in August 2010, but also ranks as the third lowest total for August in the last 10 years.
“MLS® statistics continue to indicate that we’re in a balanced market,” Rosario Setticasi, REBGV president said. “However, with a sales-to-actives listings ratio of 15 per cent, Greater Vancouver is in the lower end of a balanced market and has been trending toward a buyers’ market over the past three months.”
New listings for detached, attached and apartment properties in Greater Vancouver totalled 4,685 in August. This represents a 24.9 per cent increase compared to August 2010 when 3,750 properties were listed for sale on the MLS® and an eight per cent decline compared to the 5,097 new listings reported in July 2011. Last month’s new listing total was the highest volume recorded for August in 16 years.
At 15,437, the total number of residential property listings on the MLS® increased 1.4 per cent in August compared to July 2011 and rose 0.1 per cent compared to this time last year.
The MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 8.5 per cent to $625,578 in August 2011 from $576,597 in August 2010.
“Year over year, prices are up. However, in the detached home category, benchmark prices have come down slightly in each of the past two months,” Setticasi said. “It’s important for people entering the market to understand that activity can differ significantly depending on the area and property type.”
Sales of detached properties on the MLS® in August 2011 reached 1,020, an increase of 14.2 per cent from the 893 detached sales recorded in August 2010, and a 25.4 per cent decrease from the 1,367 units sold in August 2009. The benchmark price for detached properties increased 11.7 per cent from August 2010 to $888,243.
Sales of apartment properties reached 955 in August 2011, a 2.1 per cent increase compared to the 935 sales in August 2010, and a decrease of 34.8 per cent compared to the 1,464 sales in August 2009. The benchmark price of an apartment property increased 5.6 per cent from August 2010 to $407,457.
Attached property sales in August 2011 totalled 403, a 7.8 per cent increase compared to the 374 sales in August 2010, and a 33.9 per cent decrease from the 610 attached properties sold in August 2009. The benchmark price of an attached unit increased 4.5 per cent between August 2010 and 2011 to $511,433.
Canada National home sales hold steady in March 2011 - CREA Report
According to statistics released by The Canadian Real Estate Association, the number of homes sold through the Multiple Listing Service (MLS) Systems of Canadian real estate Boards declined in January 2010 from the previous month.
Canadian sales of existing homes rose 4.5% in January, hitting their highest level since April last year, as buyers rushed to beat tighter mortgage regulations set to come into effect next month, according to Canadian Real Estate Association figures.
Vancouver and Toronto led the growth, with half of all local markets reporting seasonally adjusted gains in the month, CREA said. Sales activity improved over the second half of last year and is now 25% above its low in July, it said.
"We anticipated the recent announcement of tighter mortgage regulations, which will come into effect this March, would pull forward sales activity into the first quarter of 2011, particularly in some of Canada's more expensive housing markets," said Gregory Klump, CREA's chief economist. "The sharp rise in sales activity in Toronto following the announcement provides early evidence confirming this," said Klump.
CREA warned the government not to take any further action until the longer-term impact of the most recent changes is fully known.
Ottawa announced in January that it would tighten mortgage-lending rules for the second time in a year to stop borrowers taking on more debt than they can afford. The government is reducing the maximum amortization period on mortgages backed by government insurance to 30 years, from 35 years, which makes monthly payments higher.
The tightening is expected to primarily hit first-time homebuyers, or those with less available for a down payment.
BMO mortgage expert Laura Parsons said the changes are a good thing.
“People are like deer in the headlights when these things happen, but they need to be properly informed,” she said. “This is a good thing, it saves them money.”
Reducing the amortization period by five years to 30 years would save about $53,000 in interest payments over the life of the mortgage, she said.
Actual new listings through the MLS System posted their biggest month-over-month increase since 2007 in January, with more than double the listings from the previous month, CREA said.
As sales activity and new supply have risen in tandem, the national market remains balanced, CREA said. The national sale-to-new listings ratio stood at 55.7% in January, little changed from the previous two months.
Parsons said BMO expects the market to remain balanced throughout 2011.
“According to our survey, 61% of homeowners are confident their homes will hold their current values throughout the year,” she said.
The national average price was little changed from the previous three months at $343,675, an increase of 4.5% from January last year, CREA said.
The January year-over-year gain was distorted by a jump in the number of multi-million dollar homes sold in a couple of areas in Greater Vancouver, it said.
CREA boosts annual resale housing forecast for 2011 (Video Clip)
The Canadian Real Estate Association (CREA) has revised its 2011 forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations, and extended it to 2012.
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